They don't want to compete in this market, they want to CREATE a new market.

Their history with hardware tilts toward coming out with overpriced gadgets.

Some actually made sense, like the Spot Watch. But with the single exception of the XBox, every hardware innovation by Microsoft has been overpriced.

It's enough to make you recall Steve Job's obsession with pricing stuff at $9,995.

Some have theorized that Microsoft is pursuing a "cloners" strategy.

Make a tablet, and give away the design so competitors can jump in.

Sell at a premium for a while, until the new platform is established, and then taper off and spin off the division entirely.

If anyone here has an interest in history, IBM did much the same thing and for much the same reason.

Apple had the Personal Computer market locked up with the Apple II. The only competitors were, well, junk.

IBM hired somebody to make them a beige box, and then published the BIOS.

That let all the other companies jump in, and the term "IBM Compatible" was coined.

The theory at the time was IBM wanted to create a new market niche, and then make money by selling software and operating systems, not hardware.

And it would have worked.

But they trusted Microsoft. And Microsoft stole their market niche right out from under them.

IBM tried to take the PC market away from Apple, and Microsoft took it away from THEM.

Now Microsoft is building a paint-by-numbers PC Tablet, hoping to create a market niche for Windows Tablets that just wasn't happening on it's own.

And if it succeeds in wiping out the iPad, which is will not, Microsoft will then relax the reins a bit and keep making money selling software.

They're terrified. They haven't been this much at risk since the Internet took attention away from Windows.

There was a time when it became obvious that the Browser could substitute for most of the functions Windows does, moving files, launching files, and handle networking at the same time.

That was a definite threat, and had to be dealt with. So Microsoft poisoned the well, releasing IE for free, and destroying the profit motive in developing Browsers before they could replace the Windows GUI.

And it worked. Browsers are crippled one-trick ponies now. They can't launch and run other apps, they can't even integrate email functions without clumsy webmail.

(Apple's OpenDoc technology could have integrated all those functions, but it was sidelined).

Today, the iPad is eroding the low end of laptops, which themselves have already eroded the low end of desktops.

If this continues, the iPad will become the de-facto standard for all portable computing; and if it takes over the Enterprise Market, Microsoft will become a second banana.

No more Domination. No more giant fees coming their way. No more businesses kneeling at their feet.

Microsoft knows they can't invent anything of their own; they've tried, too many times, and nothing works even when the technology is actually interesting.

Their only hope is to do what they do best: watch for promising trends and try to sabotage them.